Binance Still Keen On Nigeria Following End Of Detained Exec Saga

After months of tension and scrutiny, Binance executive Tigran Gambaryan has left Nigeria following the dismissal of all charges against him by Nigerian authorities earlier this week.

Detained since February on charges of tax evasion and money laundering, Gambaryan’s release marks the end of a turbulent chapter for Binance’s Nigerian operations. Despite the lengthy detention of one of its top compliance officials, Binance remains keen on building its presence in the Nigerian market.

Binance CEO Richard Teng implied this in a statement on Thursday, expressing optimism about Nigeria’s potential for blockchain innovation. “With a young, tech-savvy population and a strong interest in digital finance, Nigeria is well-positioned to leverage blockchain technology to address economic and social challenges. We look forward to playing a constructive role in that effort,” Teng stated, signalling that Binance still sees a future in Nigeria despite the recent setbacks.

Nigeria ranks among the top countries for crypto adoption globally, with crypto transactions growing 9% year-over-year to USD 56.7 B between July 2022 and June 2023, according to a report by blockchain research firm Chainalysis. Crypto is gaining ground in Nigeria as Africa’s most populous nation grapples with a weakening currency and soaring inflation.

The Detention Saga

The troubles began in February when Gambaryan and Nadeem Anjarwalla, another Binance executive, arrived in Abuja to address issues raised by Nigerian regulators.

The Economic and Financial Crimes Commission (EFCC) detained the two executives over what it claimed were “suspicious flows” through Binance’s local operations. Shortly after, the EFCC charged the pair with tax evasion and alleged money laundering of over USD 35 M. Gambaryan’s detention continued even after Anjarwalla reportedly escaped to Kenya in March.

During his detention, Gambaryan’s health declined considerably, raising concerns among family, colleagues, and U.S. lawmakers. According to his lawyer, Gambaryan contracted pneumonia, malaria, and developed a herniated disc that reportedly required surgery. His family lamented that “the past eight months have been a living nightmare,” adding that his health issues had worsened significantly while in custody.

Teng had implied in May that Nigerian officials might have attempted to pressure the exchange’s representatives into paying a settlement to “make the issues go away.” Later that month, a representative for the Gambaryan family revealed he had been dealing with various health issues since his detention. By June, U.S. lawmakers and officials had intensified their appeals amid reports of Gambaryan’s deteriorating health while in Nigerian custody.

Despite repeated appeals for bail, Gambaryan was twice denied release. The EFCC argued that he was a flight risk and accused the defence of exaggerating his health issues. These arguments ultimately failed to hold up, as the EFCC dropped all charges against him on October 23, citing his deteriorating health and his peripheral role within Binance.

Legal and Regulatory Tensions with Binance

Although Gambaryan has left Nigeria, the EFCC’s scrutiny of Binance is far from over. The agency plans to pursue its separate case against the company for alleged money laundering, and the Nigerian Federal Inland Revenue Service has kept four tax-related charges open against the exchange, asserting that Binance had failed to register with local tax authorities. Binance has denied these allegations, while Nigerian authorities have remained committed to their ongoing investigation.

Binance’s initial response to these tensions was to suspend operations involving the Nigerian naira in March 2024. However, the company’s stance has softened since then. In his recent statement, Teng indicated that Binance is “committed to collaborating with global regulators to ensure compliance and transparency in the evolving digital asset space.” This aligns with Binance’s broader goal to maintain a presence in emerging markets, where cryptocurrency demand is high despite regulatory hurdles.

The U.S. Government’s Involvement

Gambaryan’s case also drew significant attention from U.S. lawmakers and former federal prosecutors, who advocated for his release. In June, representatives French Hill and Chrissy Houlahan visited Gambaryan in prison, expressing concern about his physical state and citing weight loss and other signs of physical strain. Gambaryan’s wife thanked the U.S. government for its intervention, noting that the family was “deeply grateful” for efforts that eventually led to his release.

This external pressure from the U.S. government may have contributed to Nigerian authorities reconsidering the charges. Sources indicated that both health concerns and the potential diplomatic fallout influenced the decision to drop charges.

What’s Next for Binance in Nigeria?

The question now is whether Binance can regain footing in the Nigerian market amid ongoing investigations. With tax charges still unresolved and a money laundering investigation underway, Binance’s long-term prospects in Nigeria are uncertain.

However, Teng’s recent comments suggest the exchange is not ready to exit. His remarks about Nigeria’s “young, tech-savvy population” signal Binance’s view that the market holds significant growth potential, especially as digital finance and blockchain technology gain traction in the region.

Binance’s continued interest in the Nigerian market is part of a broader strategy to expand its presence in Africa, where the appetite for digital assets and decentralised finance is growing. The exchange’s ability to collaborate with regulators and address concerns could ultimately determine its success in Nigeria and similar markets.